Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

 (U.S. Dollars in thousands, except per share amounts)

Three months  ended

Six months ended

June 30

June 30

2015

2014

2015

2014

GAAP net income (loss)

$168

($1,526)

$654

$459

Equity-based compensation expense included in cost of revenue

42

56

77

114

Equity-based compensation expense included in research and development expenses

494

533

885

1,134

Equity-based compensation expense included in sales and marketing expenses

165

266

244

568

Equity-based compensation expense included in general and administrative expenses

126

493

470

1,045

Deferred tax related to equity-based compensation expenses

-

(69)

-

(204)

Costs associated with the RivieraWaves acquisition, net of taxes

49

176

147

176

Amortization of intangible assets related to RivieraWaves transaction, net of taxes

216

-

428

-

Non-GAAP net income (loss)

$1,260

$2,905

$3,292

GAAP weighted-average number of Common Stock used in computation of diluted net income (loss) per share (in thousands)

20,984

20,778

20,971

21,368

Weighted-average number of shares related to outstanding options (in thousands)

259

-

187

-

Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands )

21,243

20,778

21,158

21,368

GAAP diluted net income (loss) per share

$0.01

($0.07)

$0.03

$0.02

Equity-based compensation expense, net of taxes

$0.04

$0.06

$0.08

$0.12

Costs associated with the RivieraWaves acquisition , net of taxes

-

$0.01

$0.01

$0.01

Amortization of intangible assets related to RivieraWaves transaction, net of taxes

$0.01

-

$0.02

-

Non-GAAP diluted net income (loss) per share

$0.06

$0.00

$0.14

$0.15